Photo Credit: REUTERS/Elizabeth Frantz
President Joe Biden proposed a campaign to tax giant corporations and wealthy individuals, justifying the motion as an attempt against income inequality in America. Lawmakers shared his opinion strongly enough that a bill is now docketed for reading and approval – setting off unprecedented positive reverberations among experts and lawmakers.
Joe Biden’s plan to increase taxes on the rich has been rejected by Congress, but a surprising reversal from Joe Manchin may change that. The Democratic Senator from West Virginia spoke out in favor of increasing tax rates for high-income earners and other Democrats are following suit because of its importance and relevance of the current economic landscape.
According to data, since the 1940s, huge companies contributed very little to tax revenue.
The bill would require corporations with at least $1 billion in profits to pay a 15% minimum tax. If this legislation were approved, it is estimated that more than 313 billion dollars could be collected within just 10 years.
In Biden’s opinion, businesses have profited from the community and should be taxed accordingly.
According to a recent study by the Institute on Taxation and Economic Policy, companies pay less than their federal tax liability. The research found that some large corporations have avoided paying any taxes at all. It even became more beneficial to them when former President Trump successfully reduced America’s corporate tax rate from 35% down below 21%.
When Biden assumed the presidency, he wanted to increase the corporate tax rate. Just last year, he made a proposal to Congress to increase the rate to 28%, however, the department junked the initiative.
In relation to the bill increasing the tax rates, which would be voted on this week, Senate Majority Leader Chuck Schumer hopes that Congress will also discuss other matters like “lower prescription drug prices, tackle the climate crisis with urgency and vigor, ensure the wealthiest corporations and individuals pay their fair share in taxes, and reduce the deficit.” Schumer is one of the main proponents of the bill.
One of the other proponents, Senator Manchin, said, “Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination.”
In a statement, Senator Manchin clarifies that while the method is increasing taxes on wealthy individuals, the bill, called the Inflation Reduction Act of 2022, is not the same as the Democrats’ version.
The start of Biden’s tax visions
The Manchin-Schumer bill is a watered-down, partial version of what the Democrats wanted. But it will be enough to get started on Biden’s plan in relation to the issue on corporate tax.
“This is the action the American people have been waiting for,” said Biden to lawmakers, urging them to pass the bill. “This addresses the problems of today — high health care costs and overall inflation — as well as investments in our energy security for the future.”
The Manchin-Schumer initiative has the potential to be a huge victory for Biden and his agenda ahead of this November’s elections. This could very well provide him with an opportunity in determining whether or not Democrats will maintain power over Congress.
Biden has been working hard to help boost the semiconductor manufacturing sector, which is one of his administration’s primary goals. The vice president gained a victory when an important bill was passed that will streamline procedures for producing semi-conductors efficiently. This is amid his low approval ratings.
“This bill will reduce the deficit beyond the record-setting $1.7 trillion in deficit reduction we have already achieved this year, which will help fight inflation as well,” Biden said.
“And we will pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year,” he added.
Opinions expressed by CEO Weekly contributors are their own.